The league brought two charges against the Rams last year, claiming that the club had breached financial fair play rules – but an independent disciplinary commission cleared the club, meaning they avoided a serious sanction.
However, an appeal has now been settled in favour of the EFL, with Derby set to be handed sanctions as a result.
Potential sanctions could range from a fine to a points deduction and it remains to be seen what level of punishment will be handed to the club, and whether a potential points deduction would be applied to the most recent season or carried into the 2021/22 season.
Were Derby to be deducted even three points from their 2020/21 final tally, then it could see the side drop into League One – with Wycombe Wanderers then spared.
Wayne Rooney’s side looked to have secured safety with a 3-3 with Sheffield Wednesday on the final day of the Championship season, with the Owls, Wycombe and Rotherham all dropping down to League One – but this latest twist could change the picture.
In a statement, the EFL said: “The Club and EFL will now have the opportunity to make submissions on the appropriate sanction arising out of those breaches.
“Despite media speculation there is no definitive timescale for a determination on sanction though the League will press for a decision as soon as reasonably possible and will provide a further update at the appropriate time.”
Derby County added: “The Club accepts but is disappointed with the LAP’s conclusion on the one ground that the EFL succeeded on.
"The Club and the EFL have agreed that the matter shall now be remitted back to the original DC who can determine what, if any, consequences arise from the partial success of the EFL’s Amortisation charge, and the Club is therefore currently unable to comment further.”
EFL statement in full:
An Independent League Arbitration Panel has allowed the EFL’s appeal against the outcome of an independent Disciplinary Commission in respect of misconduct charges brought against Derby County.
The panel concluded that the Disciplinary Commission was wrong to dismiss the League’s expert accountancy evidence, which demonstrated that the Club’s policy regarding the amortisation of player registrations was contrary to standard accounting rules.
More specifically, the panel determined that the Club’s policy was not in accordance with accounting standard FRS102 because it failed to accurately reflect the manner in which the Club takes the benefit of player registrations over the lifetime of a player’s contract.
The original Disciplinary Commission had already concluded that the Club did not adequately disclose in its financial statements the nature and or effect of its change in accounting policy, and there has been no appeal against that decision.
The Club and EFL will now have the opportunity to make submissions on the appropriate sanction arising out of those breaches.
Despite media speculation there is no definitive timescale for a determination on sanction though the League will press for a decision as soon as reasonably possible and will provide a further update at the appropriate time.
The EFL will be making no further comment on this matter at this time.
Derby County statement in full:
The League Arbitration Panel (‘LAP’) has granted a limited aspect of the EFL’s appeal against the Decision of the Disciplinary Commission (‘DC’) in August 2020 in relation the EFL’s Second Charge against the Club relating to the Club’s amortisation policy. No appeal was brought against the DC’s dismissal of the First Charge relating to the stadium sale.
The LAP found for the EFL on the sole ground that the Commission made an error in law “in rejecting the evidence of Professor Pope that it was impermissible in principle under the cost model for the Club to take into account possible resale values of players” in relation to the accounts for 2015/16, 2016/17 and 2017/18 seasons. The LAP rejected the EFL’s other two grounds of appeal.
The DC heard the original case over a week of evidence in 2020 included two eminent QCs and an expert accountant appointed by the EFL. It was found by the LAP to have produced an “enormously impressive and diligent” Decision. It had found that the Club had acted honestly, and its accounting policy substantively conformed with accounting standards. The LAP, which consisted of three very eminent lawyers, but no expert accountant, found that on one ground this was not so.
At the appeal the EFL accepted the DC’s factual findings at paragraph 54 of its Decision: the Club’s witnesses were found to have given truthful evidence about the amortisation policy, and their judgments were made in light of carefully researched and objectively justifiable information. The LAP did not interfere with that important finding.
The reason the EFL’s appeal took so long to determine was because of three separate preliminary issues raised by Middlesbrough FC and then the EFL, each of which required hearings and decisions by the LAP, and each of which was dismissed with the Club being successful. Had Middlesbrough and the EFL not brought those preliminary issues the appeal could have been determined in 2020.
The Club accepts but is disappointed with the LAP’s conclusion on the one ground that the EFL succeeded on. The Club and the EFL have agreed that the matter shall now be remitted back to the original DC who can determine what, if any, consequences arise from the partial success of the EFL’s Amortisation charge, and the Club is therefore currently unable to comment further.